Reflections on Danville, Ill.

I GREW UP in Danville, Ill. ZIP code 61832.

Yes, I am talking about the home of Dick Van Dyke, Gene Hackman, Jerry Van Dyke, and Bobby Short. I am sure there are other notables.

No, I am not bragging, I just want to make sure people are in tune to Danville, Ill., not Danville, Calif., or Danville, Va.

Far be it from bragging, Danville, Ill., happens to be the No. 1 cheapest urban city in the entire country to live. A couple of people on Silicon Investor recently said to me, “No wonder you are such a deflationist. You grew up in the single worst place in the entire county for real estate appreciation.”

Yes, indeed, and if you do a Google search, you will find other real estate “horror stories” about Danville.

Danville in the News

Yes, Danville is back in the news once again. Yahoo! is reporting, “Home Sales Decline in 28 States”:

“The biggest price drops in percentage terms were in Danville, Ill., where home prices fell by 11.2% in the spring compared with the spring of 2005, and the Detroit area, where home prices were down 8%.”

What Happened?

Enquiring minds may be asking, “What the H happened to Danville?” The answer is long and complex. It all goes back to “Uncle Joe Cannon” (from Wikipedia):


“Joseph Gurney Cannon (May 7, 1836-Nov. 12, 1926) was a United States politician from Illinois and leader of the Republican party. Cannon served as speaker of the United States House of Representatives from 1903-1911, and historians generally consider him to be the most dominant speaker in United States history, with such control over the House that he could often control debate. Until Dennis Hastert passed him on June 1, 2006, he was the longest-serving Republican speaker in history.”

You see, “Uncle Joe,” being the influential person that he was, controlled the very fate of Danville, Ill. He had a choice of giving Danville the University of Illinois or a Veterans Administration Hospital. Uncle Joe did not choose wisely, at least for Danville, and perhaps for humanity. Should you care to, you can even blame my being on a random decision by “Uncle Joe” decades ago. My father, Tom Shedlock, worked as a clerk for the VA Hospital in Danville for his entire career.

I graduated from Danville’s Schlarman High School in 1971. At that time, the population of Danville was about 42,000. The population peaked at about 44,000 or so sometime when I was in high school. Danville now has a population of 33,904, according to the last census. Interestingly enough, Danville is growing by leaps and bounds geographically. The area keeps expanding outward (mainly north), while much of the “inner core” decays.

When I was in high school, Danville had three pizza parlors. I think there are at least eight now. The number of additional restaurants, shopping centers, coffeehouses, etc., is now staggering. The population of Danville has shrunk by 33%, but the number of retail stores and restaurants has grown by 300%, easily. Does this make any sense?


Danville, Ill., was once home of Chuckles:


Danville was also the home of a General Motors foundry, aerosol bottling companies, a Coca-Cola bottling plant, Hyster forklift, truck manufacturing, etc., etc., etc. All have left. Hyster still exists, but in a non-manufacturing role only.

Danville still lays claim to fame as having the world’s largest grain elevator.

Following is a picture of the Lauhoff grain elevator in Danville:


That grain elevator exploded when I was in high school (grain dust powder is very explosive), and the flames could be seen as far away as Chicago, 170 miles north.

Question of the Day?

Will places like Danville just sink into the sunset, or is a revival on the way?

$250,000 will buy one of the best homes in the entire county (let alone the city proper). $250,000 in L.A. might buy you a bad house in a bad neighborhood. Yes, Danville is in decay, but it is not a crime-ridden decay. It is a decay caused not by infiltration of gangs or crime, but by the flight of businesses. Danville is an aging city.

Still, one has to wonder about all the new retail stores and restaurants. If expansion is happening in Danville, is there any place in the country (above, say, 20,000 in population) where expansion is not occurring?

Looking ahead, what does that say about pricing pressures and the ability to pass costs on? I am not talking about Danville here, but the whole country.

No, Danville does not have an ocean or Lake Michigan, but it does have cheap housing. My dad passed away just a couple years back. His house sold for the grand total of $14,000. Yes, that is the correct figure. There is no dropped zero. Still, that is all the house was worth.

When I grew up, I did not feel deprived. I thought we were “middle class.” I went to an expensive Catholic high school. One bathroom for six people did not seem unusual to me at all. The neighbors down the street somehow thought we were rich. Perhaps we were. We were happy and my parents were debt free.

Tuition at the University of Illinois was $250 a semester when I started college. It was about $400 a semester when I graduated. I did not have a car, so I hitchhiked home on weekends to be with my friends (about 35 miles). I always got a fast ride.

I am struggling to figure out how anyone in Danville can afford to send their kids to the University of Illinois today, whether they hitchhike there or not. I am not talking just about Danville, Ill., but Smalltown, USA, in general. For that matter, I may be talking for all but the top 15% of the country.

Perhaps the savior of Danville and other Smalltown cities will be when no one can afford to live anywhere else. At the current pace of outsourcing, that scenario may be coming sooner, rather than later.

Mike Shedlock ~ “Mish”
August 21, 2006

The Daily Reckoning